Derbyshire County Council's Tory leader has strongly denied claims the authority is 'operating illegally', in 'chaos' and facing 'disaster'.
Top Labour councillor Anne Western made the sensational accusations hours after the organisation axed its chief executive.
But Coun Barry Lewis - who has led the Conservative-run county council since May's local elections - rubbished Coun Western's comments and accused her of 'scaremongering again'.
As reported yesterday, Ian Stephenson has left his post of chief executive at the cash-strapped authority after the role was axed as part of a management restructure to save more than £300,000-per-year.
Coun Western, leader of the Labour group at the county council, claimed it was now without a named head of paid service - a role which Mr Stephenson carried out - and therefore in breach of section four of the Local Government and Housing Act 1989.
But Coun Lewis insisted Mike Ashworth, as delegated deputy chief executive, was doing the job of head of paid service 'at the moment' and promised 'a more formal selection process in due course'.
Coun Western said there had been no formal announcement about the current state of affairs following Mr Stephenson's departure and added: "The situation at Derbyshire County Council is chaotic.
"The chief executive was told to leave but no interim arrangements have been put in place.
"It is a legal requirement for a council to have a head of paid service and there currently isn't one so the council is operating illegally.
"So we have a part-time leader, a deputy leader who suffered a massive heart attack recently who will be out of action for the foreseeable future and no named officer in charge.
"A recipe for disaster."
Coun Lewis responded: "I'm delighted to see Coun Western is on top form with the scaremongering again.
"If she had a clue she would know that there is an acting up position among senior officers for situations like when the head of paid service goes on holiday, for example. Besides which her grasp of the legal situation is tenuous to say the least.
"We have a dedicated and experienced cabinet and team of senior officers and we are on target to deliver the savings required - something Labour wasn't able to do in its four years.
"And our new commissioning approaches will deliver more services for less money and enable us to freeze council tax in 2019-20 and 2020-21.
"The only chaos around here is in the Labour Party."
The county council - which is a billion-pound organisation serving a population of nearly 780,000 people and is also Derbyshire's largest employer - must save £85million by 2022 because of Tory Government cuts.